Which of the following will happen if a firm in a duopoly with homogeneous products increases its price above its marginal cost once a Nash equilibrium is reached?
A) The firm will earn huge economic profits.
B) The firm will gain market share.
C) The firm will lose all its customers to its rival.
D) The firm will continue to earn zero economic profits.
C
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In a perfectly competitive labor market, the industry demand curve is ________ and the industry supply curve is ________
A) perfectly elastic; upward sloping B) downward sloping; upward sloping C) upward sloping; downward sloping D) vertical; perfectly elastic
If the elasticity of demand is much greater than the elasticity of supply, an excise tax levied on the suppliers will
a. cause the suppliers to incur a greater burden of the tax than demanders b. cause the demanders to incur a greater burden of the tax than suppliers c. the burden of the tax will be shared equally between the suppliers and the demanders d. cause the entire burden of the tax to rest on the demanders e. Without more information as to the amount of the excise tax, who will incur a greater burden will be unclear